Would any government allow foreign currency to circulate in domestic economy?

shawshankinmate37927

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Bitcoin: The People's Bailout

Quote from: johnyj on May 31, 2015, 05:38:55 PM

Quote from: jjacob on May 31, 2015, 08:26:13 AM

Yes, there is a big list of countries which do just that.
http://en.wikipedia.org/wiki/Currency_substitution

Thanks for the link.

I went through the list, most of those countries are small countries who does not have a sound monetary system thus rely on a larger and more established foreign currency. But anyway it seems there are different scenarios for having a currency substitution, maybe bitcoin will work as currency substitution under certain circumstances. Unfortunately so far it works best for the drug dealer and money launderer, which is not going to help to increase the positive attitude from the government

If you think government is ever going to embrace a currency that they and their cronies can't manipulate and create, then you don't understand government.

Kprawn

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The aim will be to replace the domestic currency, like the Euro did with many other currencies. Wink

We will see a parallel existance of bitcoin as a payment system and the local currency, until the mayority of transactions are done in Bitcoin directly. When this stage is reached, people would abandon their local currency for something that is more effective.

In some cases, this situation will be forced when the local fiat currency collapse on it's own. Sad

TrackCoin

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I don't think very long time need for use every country allow to use this Wonderful currency but for that need well trained marketing team whom have to work very hard for business deals by Bitcoin. Many countries already allowed but have only in the banking systems. I think every countries banking systems have BTC personally my country have. We waiting for whole world can do one and only BTC.

johnyj

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Beyond Imagination

Quote from: jjacob on May 31, 2015, 08:26:13 AM

Yes, there is a big list of countries which do just that.
http://en.wikipedia.org/wiki/Currency_substitution

Thanks for the link.

I went through the list, most of those countries are small countries who does not have a sound monetary system thus rely on a larger and more established foreign currency. But anyway it seems there are different scenarios for having a currency substitution, maybe bitcoin will work as currency substitution under certain circumstances. Unfortunately so far it works best for the drug dealer and money launderer, which is not going to help to increase the positive attitude from the government

jaberwock

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Quote from: franky1 on May 31, 2015, 09:53:01 AM

in the world of the internet. companies ALREADY accept multiple currencies..

walmart (american) does not only accept dollars. it accepts british currencies, brazilian, indian, chinese, nigerian, south african, japanese
amazon (american) .. bla bla bla repeat
facebook .. bla bla bla repeat
google .. bla bla bla repeat
Dell .. bla bla bla repeat
apple .. bla bla bla repeat
microsoft .. bla bla bla repeat
starbucks .. bla bla bla repeat
mcdonalds .. bla bla bla repeat
KFC .. bla bla bla repeat
Kellogs .. bla bla bla repeat
budweiser .. bla bla bla repeat
nestle .. bla bla bla repeat
pepsi .. bla bla bla repeat
samsung .. bla bla bla repeat
.. need i continue?

so when companies already accept multiple currencies.. i see no issue

they usually have one site for each country. You can't buy in US dell with euros or nigerian coins, for example.

And some countries allow that payment is made with any currency, as long the commerce also accepts the local currency. But Bitcoin is not considered as currency because is not backed by a central bank or a government, so in most countries BTC payments are halfway from being banned

jehst

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21 million. I want them all.

Quote from: louise123 on May 31, 2015, 11:01:46 AM

Quote from: franky1 on May 31, 2015, 09:53:01 AM

in the world of the internet. companies ALREADY accept multiple currencies..

walmart (american) does not only accept dollars. it accepts british currencies, brazilian, indian, chinese, nigerian, south african, japanese
amazon (american) .. bla bla bla repeat
facebook .. bla bla bla repeat
google .. bla bla bla repeat
Dell .. bla bla bla repeat
apple .. bla bla bla repeat
microsoft .. bla bla bla repeat
starbucks .. bla bla bla repeat
mcdonalds .. bla bla bla repeat
KFC .. bla bla bla repeat
Kellogs .. bla bla bla repeat
budweiser .. bla bla bla repeat
nestle .. bla bla bla repeat
pepsi .. bla bla bla repeat
samsung .. bla bla bla repeat
.. need i continue?

so when companies already accept multiple currencies.. i see no issue

Do they actually accept those currencies?
Or is it just an exchange from one currency to the other at the current rate?
Like the ones we see on websites which is only a conversion from X currency to X currency.

You can use US dollars directly in places like Cambodia. I mean buying some chicken and rice from a guy on the street for $1.50 or $2.00

They have a local currency but you can use USD. Same is true in Antigua and Barbuda in the Americas. You can also find African countries where USD can be used directly.

Yes, many governments allow foreign currency to circulate domestically.

louise123

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Quote from: franky1 on May 31, 2015, 09:53:01 AM

in the world of the internet. companies ALREADY accept multiple currencies..

walmart (american) does not only accept dollars. it accepts british currencies, brazilian, indian, chinese, nigerian, south african, japanese
amazon (american) .. bla bla bla repeat
facebook .. bla bla bla repeat
google .. bla bla bla repeat
Dell .. bla bla bla repeat
apple .. bla bla bla repeat
microsoft .. bla bla bla repeat
starbucks .. bla bla bla repeat
mcdonalds .. bla bla bla repeat
KFC .. bla bla bla repeat
Kellogs .. bla bla bla repeat
budweiser .. bla bla bla repeat
nestle .. bla bla bla repeat
pepsi .. bla bla bla repeat
samsung .. bla bla bla repeat
.. need i continue?

so when companies already accept multiple currencies.. i see no issue

Do they actually accept those currencies?
Or is it just an exchange from one currency to the other at the current rate?
Like the ones we see on websites which is only a conversion from X currency to X currency.

franky1

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Merit: 4766

in the world of the internet. companies ALREADY accept multiple currencies..

walmart (american) does not only accept dollars. it accepts british currencies, brazilian, indian, chinese, nigerian, south african, japanese
amazon (american) .. bla bla bla repeat
facebook .. bla bla bla repeat
google .. bla bla bla repeat
Dell .. bla bla bla repeat
apple .. bla bla bla repeat
microsoft .. bla bla bla repeat
starbucks .. bla bla bla repeat
mcdonalds .. bla bla bla repeat
KFC .. bla bla bla repeat
Kellogs .. bla bla bla repeat
budweiser .. bla bla bla repeat
nestle .. bla bla bla repeat
pepsi .. bla bla bla repeat
samsung .. bla bla bla repeat
.. need i continue?

so when companies already accept multiple currencies.. i see no issue

thejaytiesto

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Quote from: shawshankinmate37927 on May 31, 2015, 08:22:32 AM

I was in Mexico just last weekend and I can assure you that the USD is accepted at many businesses there. You can sometimes even get a better price/exchange rate when paying in USD.

It all comes down to the merchant really. Even if there is a law that says you cannot accept foreign currencies, it doesnt even matter, as a merchant you can say okay, give me your pounds, or whatever, and you store the guy's pounds and then exchange them for your local currency. As long as you dont convert regularly it wil not raise any alarms and you can get away with it. Of course this only works with cash transactions.

jjacob

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Yes, there is a big list of countries which do just that.
http://en.wikipedia.org/wiki/Currency_substitution

shawshankinmate37927

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Bitcoin: The People's Bailout

I was in Mexico just last weekend and I can assure you that the USD is accepted at many businesses there. You can sometimes even get a better price/exchange rate when paying in USD.

el kaka22

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I know that my currency can be used in a country (but people there called it as a 'region') nearby, and almost most of the local shops accept my currency in a 1:1 rate (actually my currency is about 3% above their currency). They collect taxes in their own currency, but circulation of the two currencies is allowed in all places there.

AtheistAKASaneBrain

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I've read the government in Spain treats Bitcoin as a currency and not an asset, therefore exempt of VAT. I don't see why they wouldn't allow for it.

qwk

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Shitcoin Minimalist

Quote from: johnyj on May 30, 2015, 05:27:33 PM

For any government, bitcoin is like a type of foreign currency. Today non of the government [...] allow the circulation of foreign currency in domestic market

You're wrong. It's not illegal in most countries to use, i.e. accept or pay with foreign currency.
It's usually only a little inconvenient, because you still have to declare and pay taxes in domestic currency, which means that you necessarily have to declare the value of the foreign in local currency. Quite a hassle, but no problem for Bitcoin, since this is what you usually do by using e.g. BitPay anyway.

edit: P.S.: when I say "in most countries" I don't necessarily want to say that this is true for the majority of countries by number. I'm just loosely referring to my perception of the majority of "western democracies".

Daniel91

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Quote from: johnyj on May 30, 2015, 05:27:33 PM

For any government, bitcoin is like a type of foreign currency. Today non of the government (except Zimbabwe with a dysfunctional national monetary system) allow the circulation of foreign currency in domestic market

The reason that government don't care about bitcoin is because bitcoin's economy is still tiny, almost non-exist in the context of the national economy. But if bitcoin becomes widely spread and start to take significant part of the transaction in national economy, then there will be two currencies exist in the same economy. That will destroy all the exiting model of monetary theory and policy. I guess governments will all act like China and Russia, ban the use of it as currency

Then the payment function will become obsolete, leave it only with the function of international remittance and long term anti-inflation storage, which anyway is the main usage nowadays. Maybe that's a good thing, it means bitcoin does not need to handle several thousand transactions per second

I'm not sure that you are right about this.
Montenegro, after separation from Serbia, accepted Euro as official currency, even without official approval of EU.
So, they could also accept Bitcoin in the same way, as simple politic decision, if they could see and understand benefits of bitcoin as currency.
The time of great political change and major economic crisis is the right time for large and revolutionary changes if we have a government brave enough for such a decisions.
if I led the Greek government, and I'm under the threat of bankruptcy around the country, I'd be thinking about how to drop the euro and accept bitcoin.
I'm sure that such scenario will happen, soon or later and we will have first government to accept bitcoin as official currency.

anderson00673

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I think it has quite a lot to do with what business interests want in any particular country. If big businesses wan to use it then they will just bribe politicians to accept it. The exception might be dictatorships like Russia or N. Korea. And before you say, yes I know Russia is not strictly a dictatorship but it sure seems to act like one sometimes.

johnyj

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Beyond Imagination

For any government, bitcoin is like a type of foreign currency. Today non of the government (except Zimbabwe with a dysfunctional national monetary system) allow the circulation of foreign currency in domestic market

The reason that government don't care about bitcoin is because bitcoin's economy is still tiny, almost non-exist in the context of the national economy. But if bitcoin becomes widely spread and start to take significant part of the transaction in national economy, then there will be two currencies exist in the same economy. That will destroy all the exiting model of monetary theory and policy. I guess governments will all act like China and Russia, ban the use of it as currency

Then the payment function will become obsolete, leave it only with the function of international remittance and long term anti-inflation storage, which anyway is the main usage nowadays. Maybe that's a good thing, it means bitcoin does not need to handle several thousand transactions per second

Topic: Would any government allow foreign currency to circulate in domestic economy? (Read 828 times)